BMW 2008 Annual Report Download - page 119

120
72 Group Financial Statements
72 Income Statements
74 Balance Sheets
76 Cash Flow Statements
78 Statement of Income and
Expenses recognised
in Equity
79 Notes
79 Accounting Principles
and Policies
88 Notes to the Income
Statement
94
Notes to the Balance Sheet
1 1 5 Other Disclosures
1 2 9 Segment Information
ISO-Code EUR USD GBP JPY
in %
Interest rate for six months 2.1 1.8 3.0 1.0
Interest rate for one year 2.0 2.0 3.1 1.1
Interest rate for five years 3.3 2.1 3.2 0.9
Interest rate for ten years 3.8 2.5 3.5 1.2
in euro million 2008 2007
Held for trading
Gains / losses from the use of derivative instruments – 208 – 39
Available-for-sale
Gains / losses on sale and fair value gains / losses on available-for-sale securities;
including equity investments carried at cost –195 49
Income from investments 4 3
Accumulated other equity
Balance at  January 35 214
Total change during the year –18 –179
of which recognised in the income statement during the period under report 20 –168
Balance at  December 1 7 35
Loans and receivables
Impairment losses / reversals of impairment losses – 610 – 277
Other income / expenses – 41 –12
Other liabilities
Income / expenses –109 168
Fair value measurement of financial instruments
The fair values shown are computed using market informa-
tion available at the end of the reporting period on the
basis of prices quoted by the counterparties or using ap-
propriate measurement methods, e. g. discounted cash
flow models. In the latter case, amounts were discounted
at  December  on the basis of the following interest
rates:
These interest rates were adjusted, where necessary, to
take account of the credit quality and risk of the underlying
financial instrument.
As a result of the impact of the financial market crisis, some
of the interest rates used to measure the fair value of
de-
rivatives are based on wider-than-normal credit and liquidity
spreads. It is therefore possible that the calculated fair
values cannot be traded at present on the markets.
Currency hedging contracts used to hedge cash flows
are measured on the basis of the zero-coupon method.
As a result of the financial crisis and current climate, it is
possible – unlike in the past – that different models (e. g.
the par-method) could result in different fair values.
Closing out existing positions could have an impact on
profit or loss. The contracts involved have, however, been
entered into for hedging purposes, and it is therefore in-
tended to hold them until maturity.
Gains and losses on financial instruments
The following table shows the net gains and losses arising
for each of the categories of financial instrument defined
by IAS :
Gains / losses from the use of derivatives relate primarily to
fair value gains or losses arising on stand-alone derivatives.
Write-downs of euro  million (: euro  million) on
available-for-sale securities, for which fair value changes
were previously recognised directly in equity, were recog-
nised as expenses in . Reversals of write-downs on
current marketable securities of euro  million were recog-
nised directly in equity (: euro  million).
The disclosure of interest income resulting from the un-
winding of interest on future expected receipts would nor-
mally only be relevant for the BMW Group where assets
have been discounted as part of the process of determin-
ing impairment losses. However, as a result of the assump-
tion that most of the income that is subsequently recovered
is received within one year and the fact that the impact is
not material, the BMW Group does not discount assets for
the purposes of determining impairment losses.